Flashcards in Introduction Deck (16):
Tesla and electric cars - lack of infrastructure
Lack of infrastructure is a main bottleneck for diffusion of electric vehicles. Restricts the realistic range of the electric car to the battery capability (dont wanna stop en recharge).
Dropping oil prices made the advantage life cycle costs for electric cars smaller. Competitors didn't wanna go for the electric mobility → keep market small → difficult for Tesla to prove market validity
Marketing mix (4) or 4Ps
The marketing mix consists of the four instruments
- Product and Service Design
It is often dubbed as the 4 Ps (Product, Pricing, Place, Promotion).
Coopers nr 1 reason for Failing - Market research
Bad/not enough market research is nr 1 reason of new product failure Ex. not identifying needs in the marketplace, too little field testing or too optimistic forecasts of market need and acceptance. Managers only see what is wanted (what R&D thinks) instead of what the market needs
Incremental changes should involve average customers
The average customers representing need and demand of today (not as good with forecasting 5-10 years from now. Ideas, early designs or prototypes should not be used to much to predict future market acceptance. Average customer are too fixed on existing market and need and requirement will change. Good for incremental innovations.
Lead users are better suited to define future market by finding solutions to their needs → what they want is what market wants in the future. Already have the needs.
May include tangible elements (tech infrastructure, personal, car parks) but mostly intangible → high level of immateriality.
More difficult to visualize and make people understand the value proposition
Consumers highly integrated
Must understand customer processes to meet high service standards
Important with high interaction between service providers and customers
Leasing - What type of service?
- Non-product specific service (independent of type of industry)
- Financial help model to help customers in accessing goods (dont have to buy)
Strategic gap in product life cycle
Limited lifetime (life cycle) of existing products, services, technologies and markets → companies need to invest in developing innovations.
The strategic gap: the difference between a target revenue growth path and the future revenue stream that will be generated by products/services that are either already sold or that are in the development pipeline only.
Difference between desire and need
- Need is more related to a product/service
- Desired exists earlier in the process.
Three characteristics of services - Ex Tischline
A service is most often consumed at the same time it is produced -> Looking at tischline one part of the service is the delivery of the food which happens at the same time as the customer reviece the bag of food.
Services quality can vary since customer usually are involvoed or have different preferences -> The customers of tischline might be bad cooks but blames Tischline for the poor quality of the service.
Serives are hard to price -> When customer looks at Tischline they compare it to the price of the food ingredients in the store and dont always see the service of preparing the recipies, adding the right ingredients and the delivery.
Tesla - How could they have reduced uncertainties?
1. Pre-announcing the introduction of the Tesla Roadster to stimulate communication with potential customers and see reactions of competitors
2. Start by putting electrical engines in existing cars to see customer reactions (lower costs and field test) before further investments
3. Relying on market research in for sports car manu. Understand segment, customer characteristics and buying behavior
4. Motivate established automakers to make electric cars → mass production → ec of scale
5. All patents open source → enable other car makers to build electric cars → establish dominant design
What different uncertainties existed?
Target markets: high-end segment first?
Customers: Why do they wanna buy car? (technology or sustainability) Willingness to pay?
Competitors: Which will enter early? Follow? Which standards/dominant designs?
Procurement and Distribution: Suppliers develop parts (Tesla new and small manufacturer)
Jaworski and Kohli - Market Orientation
“… ongoing tracking and responsiveness to changing customer needs…”
It refers to the organization-wide generation of market intelligence, dissemination of the intelligence across departments, and organization-wide responsiveness to it
→ Firms must ensure that information is gathered, shared within the firm and responded to.
How to measure the level of market orientation in a firm?
1. Customer orientation: Investigation of future customer needs? Product meet customers? How often do you check? Assess perceived quality? Processes for that?
2. Competitor Orientation: Rapid response to competitors actions? Collect industry info? Top mng discuss competitors strategy?
3. Inter-Functional Coordination: Consumer info shared among functions? Circulation on customer info? Several department together response? Shared resources?
Yellowlift - Main takeaways
- Customers do not need forklifts; they need a solution to their problem. Customers want comprehensive solutions helping them to run their business in a better way (e.g. efficient warehousing). Innovative services in addition to the product offers are absolutely necessary.
- Forklift trucks become more similar. More and more competitors are able to produce high-quality hardware. It is very difficult to uphold a competitive advantage based on the products only. Services are the main source of differentiation.
- You need good business and pricing models for generating additional revenues and even higher profit margins by offering services.
- After-sales services contribute significantly to overall industry revenues. Eventually, companies become profitable only through after-sales service business.
Customer orientation: What is hindering radical innovation?
1. Customer Power: to shape organizational actions. They rather want incremental than radical innovations
2. Tight coupling: relationship between customer and organization.. Tight coupling with spec customer group means satisfying their needs. This narrows the organizations view of needs and wants to this group and exclude other groups